employment and unemployment rates; measurement


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employment and unemployment rates; measurement

  1. 1. Employment and Unemployment rates; Measurement Presented by Jason
  2. 2. Unemployment • Unemployment could be defined in physical (UP) as well as in economic (UE = U) terms. • UP = Population – Employed people • U = Work force – Employed people Where, Work force = Population - People not in workforce
  3. 3. • There is another concept called work participation rate, which equals the workforce as a proportion of the population. • u = U / Workforce • Thus it is the proportion of the unemployed persons in the total work force.
  4. 4. Kinds of Unemployment • Voluntary and Involuntary • Open and Hidden • Voluntary unemployment means willful unemployment. It may arise due to laziness, obsession with wealth and with leisure. Since this is voluntary, it poses no serious economic problem.
  5. 5. • Involuntary unemployment means forced unemployment. To be precise, a person who is willing and able to work, and is looking for a job but does not find one, is involuntary unemployed. • Involuntary unemployment is caused by the paucity of employment opportunities and hence it is an economic issue.
  6. 6. Open unemployment is • Frictional • Cyclical • Structural Hidden unemployment is • Disguised • Seasonal • Underemployment
  7. 7. Open unemployment • Frictional or turnover unemployment arises in between two jobs, the job which a person has quit in order to find the second job. • Cyclical unemployment is caused by business cycles and economic fluctuations. During droughts and floods, farmers may be unemployed, and during strikes or lockouts, industrialists and workers may remain unemployed.
  8. 8. Cont…. • Structural unemployment is caused by the mismatch of vacancies and skills of unemployed people.
  9. 9. Hidden unemployment • Disguised unemployment could arise when several people share a particular work at a given time and /or when such work is spread over time. • Some occupations are seasonal. For Eg; Farmers are occupied a lot during the Kharif (june – october) and Rabi (dec – march) seasons and have a little work during the off times. Unless, these farmers diversify and take up some other activities during the off seasons they would be seasonally unemployed.
  10. 10. Cont… • Underemployment is the situation where the work available is for lesser than the full employment hours or for periods lesser than the full working days in a given period (year/ month/week). Eg: Part time workers in industries and services.
  11. 11. Causes of unemployment • • • • • • Technology Population growth Social and cultural factors Inefficient industrial and agricultural sector Jobless growth Illiteracy
  12. 12. Measurement of Employment and Unemployment • Information on the employment situation for the economy as a whole is obtained in India from surveys conducted by the National Sample Survey Organization(NSSO). Some of the measures are :
  13. 13. • Usual Principal Status(UPS) : A person is considered to be in the labour force if he/she had been working or looking for work for atleast six months during the preceding 365 days. Those working for majority of the days in labour force are treated as employed and the rest as unemployed. • Usual Principal and Subsidiary Status(UPSS) : Even those unemployed or out of labourforce as per UPS definition but had worked for atleast 30 days are treated as subsidiary status workers and hence included under labourforce.
  14. 14. • Current Weekly Status(CWS) : A person is considered as employed if he/she had been working for atleast one hour on any day during the 7 days preceding the survey (reference week). A person not working even for one hour is treated as unemployed.
  15. 15. • Current Daily Status(CDS) : This is based on employment intensity during 14 half days of the reference week. For this estimation, every half day’s activity status will be counted over the whole week. • For measurement of rate of unemployed person days, the total count of unemployed days in the reference week is divided by the total number of workforce days during the week.
  16. 16. Full Employment • Full employment is an ambiguous concept and accordingly it has no unique definition. It means zero unemployment. Usually when unemployment rate is close to say, 3-4 percent economists call it a full employment situation. • A situation where demand for labour equals the supply of labour in the economy at a given wage rate. Or where number of people employed equals the number of vacancies.
  17. 17. Unemployment rate in India • Unemployment Rate in India decreased to 3.80 percent in 2011 from 9.40 percent in 2010. Unemployment Rate in India is reported by the India Ministry of Labour. Historically, from 1983 until 2011, India Unemployment Rate averaged 7.6 Percent reaching an all time high of 9.4 Percent in December of 2009 and a record low of 3.8 Percent in December of 2011. In India, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.
  18. 18. Chart showing Unemployment rate in India
  19. 19. THANK YOU